Capacity Demands in Africa: An Opportunity for Satellite

Today, Africa is served by several satellites and undersea fiber operators – the availability of capacity for communications over the continent is tremendous. This abundance of capacity leads to the creation of a whole new industry for high-speed connectivity from call centers to growing Internet. But most of the capacity available is limited to the capitals, coastal areas and major cities in the countries. There are cities, undeveloped and rural areas still in the dark not only in terms of utilities and infrastructure but also in terms of telecommunications as well. This market presents challenges as well as opportunities for satellite to play an important role; the potential for growth is enormous.

In Africa, the liberalization of the telecom sector, the arrival of multinational conglomerates from the Middle East, Asia, Europe and the Americas coupled with the competition in this sector are contributing to the growth of the demand and opportunities.Today, Africa is served by several satellites and undersea fiber operators – the availability of capacity for communications over the continent is tremendous. This abundance of capacity leads to the creation of a whole new industry for high-speed connectivity from call centers to growing Internet. But most of the capacity available is limited to the capitals, coastal areas and major cities in the countries. There are cities, undeveloped and rural areas still in the dark not only in terms of utilities and infrastructure but also in terms of telecommunications as well. This market presents challenges as well as opportunities for satellite to play an important role; the potential for growth is enormous.

In Africa, the liberalization of the telecom sector, the arrival of multinational conglomerates from the Middle East, Asia, Europe and the Americas coupled with the competition in this sector are contributing to the growth of the demand and opportunities. There may be more than 600 million mobile phones in Africa today but this is still a relatively small percentage to the total population of Africa, which now surpasses 1 billion. Africa’s booming mobile phone market is forecast to almost quadruple in size from a value of $60 billion in 2013 to $234 billion by 2020, according to researchers. With smartphones getting more and more popular, there is a growing demand for data to connect these bandwidth-intensive applications. Mobile operators are in a situation to expand their networks from 3G to 4G and LTE to support the bandwidth-hungry subscribers, which has resulted in more undersea fiber and satellite capacities. Still, satellite is very common and reliable means of backhauling domestic voice traffic in Africa. M-commerce is another area of growth in the region, which demands more bandwidth, be it fiber or satellite.

Another market of interest is the video broadcast services, which exists but only on a small scale across Africa. It is anticipated that the broadcast market will continue to grow, eventually reaching a critical mass of video households and channels. Once this happens, there will be a tremendous potential for the video broadcast and pay-TV markets to have similar types of significant growth and success that you see today in most of the developed markets of Europe, Asia and the Americas. It will be very well suited for satellite application and encouraging for satellite service providers.

With these developments, the demand for satellite capacity will need to expand to absorb the growth for traditional applications for most of the developed areas where the remote and rural are catching up with the progress made in the metropolitan areas. Satellite is still by nature the most efficient distribution means for broadcast and point-to-multipoint types of applications. The demand will come from any application that is in line of the nature of the satellite as mean of communications.

Felix Damiba is the managing director of Africa for Asia Broadcast Satellite.